The US Federal Reserve has reached a significant milestone by raising its key interest rates by 25 basis points, bringing them to a range of 3.75% to 4%. This decision, the first under Kevin Warsh’s leadership, was widely anticipated by financial markets, which had priced in a greater than 90% probability of the move. The primary goal of this maneuver is to curb persistent inflation, which hit 3.4% year-on-year in August, driven largely by surging energy costs.
For Bitcoin, this new monetary landscape keeps constant pressure on so-called risk assets. The cryptocurrency is currently trading within a narrow range, oscillating between $75,000 and $76,000, with no major reaction to the announcement. The correlation remains traditional: in an environment where bond yields are rising, investors tend to shy away from volatile assets in favor of traditional, safer investments. Caution remains the order of the day, especially if the US central bank confirms further monetary tightening before the end of the year.
The macroeconomic backdrop is growing increasingly complex due to external factors beyond the Fed's full control. The skyrocketing price of oil, now exceeding the $100 per barrel mark due to geopolitical tensions in the Middle East, is fueling persistent inflationary fears. The central bank finds itself in a delicate position: it must dampen domestic demand while remaining powerless against energy supply shocks, which mechanically heightens uncertainty across financial markets.
In the short term, investors are now closely monitoring the Bank of Japan, whose next interest rate decision could have significant repercussions. A rate hike by the Japanese central bank could disrupt carry trade strategies, impacting global liquidity for digital assets in the process. Caught between US monetary normalization, commodity volatility, and shifting Asian policies, Bitcoin stands at a crossroads, suspended by a multitude of exogenous variables that keep strong downward pressure on its price.